Why does Obama continue to push health insurance for everybody?

EXPLAIN IT TO ME

March 03, 2010|By Pete Leffler | Of The Morning Call

Q: Pennsylvanians do not want Washington to require everybody to carry health insurance, a recent Morning Call/Muhlenberg College poll shows. Yet President Obama keeps including just such a provision in his reform plans for health care. Why?

A: In a word: Savings.

Not everybody who ''lacks'' health insurance has too little money to pay for it.

Some people, typically young and/or ''healthy,'' forsake insurance because they don't believe they need it or because they'd rather spend the money on something else.

But people without insurance often go without the routine screening tests (blood pressure, cholesterol, various cancers) that are meant to catch health problems before they develop into serious -- perhaps even life-threatening -- problems.

As a result, those people show up in America's emergency rooms and quickly rack up hefty medical bills. Hospitals may eat some of that cost but also may pass some along to other patients and their health insurers, driving up costs for everybody.

Health costs have been climbing at twice the rate of inflation.

So, the argument goes, doing without health insurance is short-sighted, inefficient and very, very risky. Medical bankruptcy can result as unexpected bills pile up, and that can add to the nation's foreclosure crisis.

Supporters say a so-called ''individual mandate'' is necessary to, like auto insurance, protect not only the individual but also bystanders.

Opponents say such a government mandate would rob individuals of choice and penalize those who opt out.

The initial legislation came from the late Ted Kennedy. Massachusetts has an individual mandate that requires its residents to carry minimal health coverage through a private insurer or the state health bureau. Those who do not face penalties.

Obama's latest health care proposal, as summarized by the Kaiser Family Foundation, would require U.S. citizens and legal residents to have qualifying health coverage.

Those without coverage would pay a tax penalty of the greater of $695 per year up to a maximum of three times that amount ($2,085) per family or 2.5 percent of household income.

The penalty would be phased-in over three years:

-- $95 in 2014 or 1 percent of taxable income;

-- $325 in 2015 or 2 percent of taxable income;

-- $695 in 2016 or 2.5 percent of taxable income.

After 2016, the Kaiser folks say, the penalty would be increased annually by a cost-of-living adjustment.

Exemptions would be granted for financial hardship, religious objections, American Indians, those without coverage for less than three months, undocumented immigrants, incarcerated individuals, if the lowest cost plan option exceeds 8 percent of an individual's income, and those with incomes below the tax filing threshold (in 2009 the threshold for taxpayers under age 65 is $9,350 for singles and $18,700 for couples).